According to data from China Index Academy, China’s new home prices showed a slight increase in September, ending a four-month decline. The average prices rose by 0.05% compared to the previous month, with only 30 out of 100 cities surveyed reporting a fall in prices. This increase was mainly driven by developers launching new and higher quality housing projects. These positive developments come after a series of support measures implemented by the Chinese government to boost the property sector, which accounts for a significant portion of the country’s economic activity.
However, the confidence in the property sector has been shaken since 2021 when Beijing started cracking down on debt accumulation by developers, leading to a debt crisis. The ongoing problems in the sector have had a negative impact on the Chinese economy and global financial markets. While the recent policy measures have provided a small boost in new home sales in major cities like Beijing, there are concerns that this improvement may be short-lived and could dampen demand in smaller cities.
The report suggests that if these supportive policies continue to be optimized, the housing market in first-tier cities is likely to stabilize in the current quarter. However, it may take longer for smaller cities to experience a recovery. It remains to be seen how the property market in China will evolve in the coming months and whether the government’s measures will have a lasting impact on the sector’s stability.
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